A.M. Best Affirms Rating of ING Life Insurance Korea, Ltd. and Assigns Issuer Credit Rating; Revises Outlook to Positive.OLDWICK, N.J. -- A.M. Best Co. has affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. the financial strength rating of A (Excellent) and assigned an issuer credit rating of "a+" to ING Life Insurance Korea, Ltd. (INGLK) (South Korea). The outlook has been revised to positive from stable. The ratings reflect INGLK's excellent profitability, adequate capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. and growing presence in the Korean life insurance market. The ratings also reflect the company's successful entrance into the bancassurance Bancassurance A French term referring to the selling of insurance through a bank's established distribution channels. Notes: The result is a bank that can offer banking, insurance, lending, and investment products to a customer. distribution channel and its strong management team. Due to its strong brand recognition and professional sales channel, INGLK was able to grow its presence as the fourth-largest player in the Korean life market to 5% premium market share in fiscal year 2004, which ended on March 31, 2005. The company recorded a 7% market share in new business in fiscal year 2004. A.M. Best believes that INGLK's growth will be sustained as it has a balanced insurance portfolio. INGLK increased its profitability in line with the strong premium growth, which is best represented by its embedded value Embedded Value A common valuation measure used outside North America particularly in the insurance industry. It is calculated by adding the adjusted net asset value and the present value of future profits of a firm. . INGLK's net income increased to KRW KRW In currencies, this is the abbreviation for the Korean Won. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 146 billion (USD USD In currencies, this is the abbreviation for the U.S. Dollar. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 142 million) in fiscal year 2004, from KRW 103 billion (USD 101 million) in fiscal year 2003. A.M. Best believes that the company generates enough internal capital to support its business. The Korean local solvency ratio Solvency Ratio One of many ratios used to gauge a company's ability to meet long-term obligations. Notes: Derived by taking a company's net worth and dividing by total assets. See also: Asset, Asset Valuation, Balance Sheet, Fundamental Analysis, Income Statement stands at 179% as of September 2005. Although improvement in capitalization will not be evident in fiscal year 2005 due to a decrease in unrealized capital gains, A.M. Best expects that INGLK's risk-based capitalization will slowly improve going forward. Partially offsetting these factors is the low interest rate environment and the strong competition in the annuity market fueled by the bancassurance channel. Korea is currently experiencing a low interest rate environment, which is likely to continue. However, A.M. Best believes that the company's current investment yield is well above the assumed interest rate. Another offsetting factor is the increasing competition in the annuity market. Banks have set up life subsidiaries to provide bancassurance by selling mostly savings products. INGLK will have to compete with more companies in the annuity market. For Best's Ratings Best's rating A rating A.M. Best Co. assigns to insurance companies based on the company's ability to meet its obligations to its policyholders. , an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com. |
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